Real estate business plan example

B U S I N E S S P L A N
2019
Real Estate Business
Plan
John Doe
10200 Bolsa Ave, Westminster, CA, 92683
(650) 359-3153
text@example.com
http://www.example.com/


Table of Contents
Executive Summary 3
Market Opportunity 3
Demand for Housing 3
Management 3
Financing & Investment Forecast 4
Company Overview 5
Introducing Kegan 5
Business Model 5
Short Term Goals 5
Long Term Strategies 5
Keys to Success 6
Kegan Villas 7
Location 7
Contemporary Living for the 21" Century 7
The Complete Package 7
Pricing Strategy 7
Implementation Strategy - Action Plan 8
Market Opportunity 9
Target Market Overview 9
Demand for Housing 9
Housing Shortage Overview in Saudi Arabia 9
Housing Shortage Overview in Riyadh 9
Housing Prices 9
Kegan Home Prices 10
Marketing & Sales 11
Market Positioning & Brand 11
Marketing Strategies 11
Sales Strategies 11
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Sales Process 11
Competition & Competitive Advantages 13
Competitive Landscape 13
Direct Competitors 13
Features 13
Competitive Advantages 14
Company & Management 15
Company 15
Development Team 15
Developer 15
RASHID BIN SAID 16
Director of Construction 16
Future Senior Team Members 16
Director of Construction 16
MEMBER NAME 16
Chief Accountant 17
MEMBER NAME 17
Director of Marketing & Sales 17
MEMBER NAME 17
Other Staff 17
Independent Directors 17
Financial Plan 19
Financing & Investment Forecast 19
Solid Balance Sheet 19
Impressive Cash flow 19
Financial Summary 19
Financial Assumptions 19
Projected Profit and Loss 20
Balance Sheet Projections 22
Cash Flow Statement 24
2 / 25

Executive Summary
Start Writing here...
Examples
 Kegan
Overview: Mr. Rashid Bin Said, a banking executive based in Riyadh, Saudi
Arabia has developed a unique concept for residential housing communities to be
located in the King Abdullah Financial District area of Riyadh located north of the
city. The initial community will have between 25-50 single family villas and will be
targeted toward middle-class residents of Riyadh.
Market Opportunity
Examples
 Kegan
According to a Jones, Lang, Lasalle report published in 2008, "the Saudi real
estate market is in an early stage of development. It S however, poised for liftoff
with demographic fundamentals and massive infrastructure investment providing
the basis for growth and a positive outlook for most sectors of the real estate
market. The residential sector offers the greatest potential. With an estimated
residential stock of 875 million sq. m. in 4 million dwellings, the Saudi residential
Demand for Housing
Examples
 Kegan
A strong demand for housing sterns sustainable for the near future, creating good
opportunities for the real estate development business. Based on the most
conservative estimates, housing units are expected to increase from 439 million
housing units in 2004 to reach 7.01 million by 2020, representing a total
investment of SAR 1.2 trillion. (Source: Jones, Lang, Lasalle.)
Competition: There are a number of home builders and developers of residential
Management
Examples
 Kegan
Mr. Rashid Bin Said, a US. educated career banker will build an outstanding team
of individuals that will form the Kegan development team.
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2019 Business Plan | Real Estate Business Plan 3 / 25

Financing & Investment Forecast
Examples
 Kegan
In order to launch the Company, Kegan is seeking an investment of permanent
capital in the amount of SR 50 million. In return for its cash investment, the new
shareholders will receive an equity interest in the Company. The following
financial summary is based upon successful completion of the five residential
communities (25 homes each) and is presented for illustration purposes only. No
distributions or return of capital is contemplated within these figures.
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Company Overview
Introducing Kegan
Examples
 Kegan
Welcome to Kegan Real Estate Company, Saudi
Arabia's newest home builder and developer of
residential communities.
Kegan Real Estate will design and build new villas
and communities with the customer in mind. Whether
the customer is buying their first villa or needs
Business Model
Examples
 Kegan
Kegan is a real estate developer in the truest sense of the word. It owns no
construction equipment. Nor does it employ construction workers. There are no
engineers, architects or designers on its staff. Kegan buys land and utilizing the
resources of others on a variable cost basis, turns the land into profits. means
there are few fixed operating expenses.
While there will be land and inventory on the Company's balance sheet, the value
Short Term Goals
Examples
 Kegan
During the first two years of the planning period, Kegan will achieve the following
goals and objectives:
Register the Company as a Saudi corporate entity;
Raise the capital necessary to develop the first community;
Assemble the Company's senior team which will include a Director of
Long Term Strategies
Examples
 Kegan
Kegan has set the following longer-term strategies for the Company:
The profits from the completion of the first community will be retained in the
Company and used to build the Company's balance sheet;
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Toward the end of year 2, Kegan intends to close the acquisition of its
second piece of land;
Keys to Success
Examples
 Kegan
Kegan believes it has the right combination of experience, skill, and vision to
quickly put the Company on a rapid track for growth and profits. The following
factors will contribute to its success:
Land for residential development will be acquired only in excellent locations;
Well conceived and compelling architectural design will be Saudi specific
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Kegan Villas
Location
Examples
 Kegan
The Company's first residential development will be located in the King Abdullah
Financial District area of Riyadh located north of the city. Riyadh is the capital city
of the Kingdom of Saudi Arabia and now rivals any modem city in the world in the
splendor of its architecture. Broad highways sweep through the city, passing over
or under each other in an impressive and still growing road network_ Trees now
bedeck the Woad streets and venues, giving pleasure to passers-by and shade
Contemporary Living for the 21" Century
Examples
 Kegan
In its first community, Kegan will build comfortable, affordable villas that are Saudi
specific, yet unique and right for the way people want to live today. A typical
Kegan three-story villa offers a versatile floor plan. The upper level is spacious
with three bedrooms, two full baths, and a balcony that may be converted to a
fourth bedroom. The luxurious master suite will be a favorite retreat with its private
deluxe bath featuring an extravagant garden tub. Downstairs, the buyer will
The Complete Package
Examples
 Kegan
Buying a Kegan villa is not only unique but is also the Company's principal
competitive advantage. In Saudi Arabia new homes are typically sold as shells
with only the fixtures, flooring, garage and landscaping included. The buyer buys
the shell and is responsible for all other improvements. With a Kegan villa, the
buying experience is turned on its head because a Kegan home will include split
A/C„ all cabinetry, complete kitchens and bathrooms, all electronics, all
Pricing Strategy
Examples
 Kegan
Kegan has determined that its target customer can afford to pay SR 13-1.4 million
for a completely furnished, nicely sized villa. Furthermore, Kegan has determined
that to achieve its anticipated investment returns, the villas must be priced at a
multiple of 1.8 times cost. The pricing scenario assumes that the average villa will
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have a total of 400 sqm of living space in three levels and be constructed on a
plot of approximately 400 sqm. The table below provides an analysis of the land,
Implementation Strategy - Action Plan
Examples
 Kegan
The following is a step by step approach to the successful development of
Kegan's first residential community project. Please note that while a numerical
order is provided, some activities will happen simultaneously.
Implementation Strategy
1. Locate properly
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Market Opportunity
Target Market Overview
Examples
 Kegan
Riyadh, or Arriyadh, is the capital of Saudi Arabia and the nation's legislative,
financial administrative, diplomatic and commercial center. It is also the location
for foreign embassies, universities, banks and corporate headquarters.
In a region where tradition, modernity, and globalization converge, Arriyadh is the
focal point of the Middle East's largest economy. Arriyadh is an international
business hub where residents and visitors experience contrasting lifestyles in a
Demand for Housing
Housing Shortage Overview in Saudi Arabia
Examples
 Kegan
According to Jones Lang LaSalle, an international financial and professional
services firm specializing in real estate services and investment management,
Saudi Arabia's residential market is defined by two trends:
A fast-growing and relatively young population along with a declining
average household size, which together is driving demand for additional
Housing Shortage Overview in Riyadh
Examples
 Kegan
Colliers International released a report in 24" Quarter of 2009 that provided ample
data on the housing shortage in Riyadh. The report summarized its findings as
follows:
"Riyadh's population continues to grow by 2.2% per annum, prompting the
Development Authority to forecast annual demand for 30,000 residential units
by 2013. Despite the efforts of the Saudi Government through the Real Estate
Housing Prices
Examples
 Kegan
The following was prepared by the Banque Saudi Francis in their first BSF Real
Estate Survey conducted at the end of Q1 2010:
"Residential property prices in Saudi Arabia, which eased broadly in 2009, are
on the rise again in 2010, according to the findings of Banque Saudi Fransi's
first BSF Real Estate Survey. The capital city Riyadh has witnessed the biggest
gains in apartment and villa prices so far this year, although property values in
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Kegan Home Prices
Examples
 Kegan
Kegan homes will be affordable at 350-500 sqm. This is the right size for the
Company's target customer. Kegan believes that this largely un-penetrated
demographic represents people who cannot afford a shell house worth more than
SR 2 million but want a house that is livable and meets all of their requirements.
Prime target customers are professionals of the medium to upper medium class,
who do not have the time to build their own home, but want a quality home that is
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Marketing & Sales
Market Positioning & Brand
Examples
 Kegan
In marketing Kegan, the developer has two challenges. The first is creating
awareness for the community in a cost-efficient way that will drive a sufficient
number of qualified prospects into its sales channels. The second challenge is to
distinguish the Property from the other residential developments, not just in the
King Abdullah Financial District but also from residential developments in all of
Riyadh.
Marketing Strategies
Examples
 Kegan
Kegan will achieve its marketing objectives through a carefully conceived and
aggressively implemented marketing program highlighted by the following tactics:
Advertising in major Riyadh newspapers and news sites;
An incentive program for the local real estate agents and brokers to refer
buyers to Kegan;
Sales Strategies
Examples
 Kegan
Kegan's marketing strategies are designed to drive prospective buyers into the
Company's sales channels so that prospects can be converted into villa buyers.
Kegan will implement a multi¬faceted sales approach to attract, contact and retain
New customers through several approaches:
Professional in-house sales team to field inbound inquiries and work with
Sales Process
Examples
 Kegan
When prospective buyers visit the Kegan community sales center, they will be
greeted by a sales agent and are asked how they might be assisted. Most visitors
will be encouraged to first tour the sales center where they will be able to see
graphically enhanced drawings, plans, and photographs of both interior and
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exterior villa features. It is at this time that the sales agent will explain the unique
way in which Kegan villas are purchased and how that differs from other
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Competition & Competitive Advantages
Competitive Landscape
Examples
 Kegan
As was documented in Section 4 of this document, there is a significant demand
for new housing in Saudi Arabia and specifically in the Riyadh metropolitan area.
The response to this demand has been the growth of the residential building
sector of the economy. There are a small number of large residential builders and
community developers in Riyadh as well as a larger number of smaller builders.
The biggest issues that separate one builder from another are quality, affordability
Direct Competitors
Features
Dar Al-Arkan
Dar Al-Arkan is now operating
on a larger scale than before
and believes it is now leading
the way in the Kingdom in the
design, project management
and construction of master-
planned lifestyle residential
communities. Such
communities are developed
over large parcels of land and
include social as well as public
service utilities, leisure space,
sporting facilities and other
amenities.
http://www.slarkan.com/
Al-Saedan
Al-Saedan Real Estate Co is
one of the leading real estate
companies in Saudi Arabia
and within Arab countries. The
company has a strong profile
of development achievements
in the field of plans
development, building
commercial and residential
centers, sellingand buying
local and international real
estates, providing consultation
in real estates and providing
valuation and estimation
services.
http://www.saedan.com/?p2
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Almosa Real Estate
There does not appear to be a
website on this company.
However, Kegan believes that
this company is similar to Dar
Al-Arkan and Saedan in that
Almosa is a large company
that has more interest in
buying land than in building
communities with the people
who live there in mind.
Competitive Advantages
Examples
 Kegan
Kegan Real Estate Company believes that once it begins operations it will have a
small number of important competitive advantages over the other builders
including:
Though Kegan will begin much smaller than most established builders, it will
be managed as professionally as the most professional of them. Read More 

Company & Management
Company
Examples
 Kegan
Kegan Real Estate Company will register as a corporate entity under the laws of
the Kingdom of Saudi Arabia prior to raising the capital for the first development.
Kegan's offices will be located in Riyadh. The Company, when fully staffed will
have 6 full-time employees, complemented by several independent contractors
and part-time consultants on a project basis.
Development Team
Examples
 Kegan
Kegan has allocated '1 year from the time the initial capital is raised for the project
until the first community is ready to sell its first villa. Kegan's founder understands
that the development of the project is a team effort. The Kegan development team
will consist of Kegan founder, a Director of Construction and an impressive list of
design and construction firms.
Assembling a team of professionals to address the environmental, economic,
Developer
Examples
 Kegan
The founder will act as the Developer. The developer will be responsible for.
Completing concept, feasibility, and budget;
Property Acquisition;
Hiring and supervising the Director of Construction;
Organizing all financing;
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RASHID BIN SAID
Founder, Developer & CEO - rashid@example.com
Mr. Bin Said graduated from Marymount University in the United States with a combined
major in Marketing and Mass Communications. Post graduation he worked for the Walt
Disney Company (NYSE DIS) and Bank of America (NYSE: BAC) in the US.
Mr. Bin Said returned to Saudi Arabia in late 2003 where he joined the Samba Financial
Group as a Relationship Manager in the Corporate and Investment /Smiting Group,
handling top tier corporate clients and their banking needs. He later moved to Arab
National Bank where he served in a similar position for 2 years. Mr. Bin Said is currently a
Senior Relationship Manager at Alinma Bank. Subsequent to the funding anticipated by
this document, Bin Said will resign his position with the Bank and commit his full time to
Kegan Real Estate Company.
Director of Construction
Examples
 Kegan
The Director of Construction will be responsible for all aspects of the construction
of the project. This means that the Director of Construction will be responsible for
turning over a completed villa to the Developer for sale to each customer. Specific
responsibilities include:
Hiring and supervising a General Contractor;
Future Senior Team Members
Examples
 Kegan
The Director of Construction will oversee all aspects of an entire building and
construction project, so organizational skills are pertinent. He will typically have a
university degree in architecture, construction science or a related field with an
emphasis on construction management and at least 5 years of professional
experience. This individual will have experience in reading construction
documents and manuals, estimating, procuring, budgeting and possess excellent
MEMBER NAME
Examples
The Chief Accountant, under the direction of the CEO, is responsible for
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Chief Accountant
 Kegan
The Chief Accountant, under the direction of the CEO, is responsible for
supervision and control of the general accounting area, and for financial
statement and report preparation. This individual will possess a university degree
in accounting and have at least 5 years of job experience related to real estate or
construction.
The Chief Accountant will be responsible for the supervision and control of the
MEMBER NAME
Chief Accountant
Director of Marketing & Sales
Examples
 Kegan
The Director of Marketing & Sates will provide leadership and coordination of all
sales and marketing functions and strategies reporting to the CEO. This individual
must have previous experience in the marketing and sales of single-family homes
in the Kingdom. Specific responsibilities will include:
Direct and coordinate Company sales and marketing functions;
MEMBER NAME
Director of Marketing & Sales
Other Staff
Examples
 Kegan
In addition to the four senior management team members highlighted above,
Kegan will employ the following additional full-time staff members:
Sales Manager responsible for villa sales
Administrative Assistant to the CEO and Director of Construction
Part-time sales agents will assist the Sales Manager in villa sales. All other
Independent Directors
Examples
Independent directors collectively possess an extensive business, legal,
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 Kegan
Independent directors collectively possess an extensive business, legal,
regulatory, financial, and entrepreneurial experience. Kegan believes that the
most effective independent directors will come from the Company's investor group
or individuals suggested by its investors.
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Financial Plan
Financing & Investment Forecast
Examples
 Kegan
In order to launch the Company and complete lave residential developments,
Kegan S seeking an investment of permanent capital in the amount of SR 50
million. In return for its cash investment, the new shareholders will receive an
equity interest in the Company.
There are two very important distinguishing factors that separate Kegan from
other residential community developers. The first is its unique business model in
Solid Balance Sheet
Examples
 Kegan
The business model that has been detailed in this document provides for the
development of 5 -25 single family home developments to be built during the 6
year planning period. In years 2 - 6 the company will return in excess of 30% on
sales and a return on investment approaching 20% in each year. The Company is
being capitalized on a solid foundation of permanent capital. No debt will be
employed in the development of the first five communities.
Impressive Cash flow
Examples
 Kegan
Perhaps the most compelling aspect of the financial model is its cash flow. Kegan
generates positive cash flow of approximately SR 9 million in years 2 - 3 and an
impressive SR 23 million in year 6. This leaves ample cash available for
distributions in the event that the Company's Board of Directors was to decide on
annual distributions. For example, if the Board were to distribute say, SR 5 million
in each year beginning in year 2, the investors would receive their entire return of
Financial Summary
Examples
 Kegan
The following financial summary is based upon successful completion of the five
residential communities (25 homes each) and is presented for illustration
purposes only. No distributions or return of capital is contemplated within these
figures.
Financial Assumptions
Examples
It is assumed that:
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Examples
 Kegan
It is assumed that:
Kegan will start one residential community each year for five years.
Each community will have 25 homes
Each community will take 24 months to complete, with the following timeline:
Month 1: Purchase Land
Projected Profit and Loss
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Year1 Year2 Year3 Year4 Year5
REVENUE
Single Family Homes 0 32,500,000 32,500,000 32,500,000 32,500,000
Minus: Sales
Communications and
Expenses
0 (812,500) (812,500) (812,500) (812,500)
Net Revenue
0 31,687,500 31,687,500 31,687,500 31,687,500
COST OF SALES
Land and Construction 15,000,000 15,000,000 15,000,000 15,000,000 0
Basic Leaving
Necessities
0 2,145,000 2,145,000 2,145,000 2,145,000
Furniture (Ground
Floor)
0 950,000 950,000 950,000 950,000
Furniture (2nd & 3rd
Floor)
0 1,375,000 1,375,000 1,375,000 1,375,000
Electronics 0 450,000 450,000 450,000 450,000
Total Cost of Good Sold 15,000,000 19,920,000 19,920,000 19,920,000 4,920,000
GROSS PROFIT
(15,000,000) 11,767,500 11,767,500 11,767,500 11,767,500
OPERATING EXPENSES
Payroll Expenses
Payroll 1,800,000 1,890,000 1,984,500 2,187,911 2,297,337
Payroll Taxes 162,000 170,100 176,605 196,912 206,769
Employee Benefits 12,000 12,600 13,230 14,936 16,316
Payroll Processing 1,930 1,390 1,985 2,136 2,297
Total Payroll Expenses 1,975,800 2,074.590 2,178,320 2,401,997 2,621,517

General and
Administrative
Expense
Automobile
Expense
145,000 152,250 159,063 167,898 178,246
Computer
Expense
50,000 52,500 55,126 57,661 80,775
Due and
Subscriptions
1,930 1,390 1,985 2,034 2,297
Entertainment and
Meals
0 0 0 0 0
Insurance 0 0 0 0 0
Miscellaneous 0 0 0 0 0
Office Expense 8,000 6,300 6,615 8,946 7,293
Postage and
Delivery 2,400 2,520 2,413 2,778 2,917
Accounting Fees 100,000 105,000 110,250 115,783 121,651
Legal Fees 70.000 73.500 77.175 81.034 65,035
Rent 200,000 210,000 220,500 231,525 243,101
Telephone 13,000 13,850 14,333 15,049 15,932
Travel 93,030 31,500 33,075 34,729 30,465
Total General and
Administrative
Expenses
618,200 849,110 681,566 715,844 751,428
OPERATING
EXPENSES
2,594,000 2,723,700 2,859,885 3,002,379 3,153,023
(17,934,000) 9,043,800 8,907,615 8,764,621 8,131,477
Deprecitation 0 0 0 0 0
Interest Payment 0 0 0 0 0
NET INCOME (17,934,080) 9,043,800 8,937,615 8,7134,621 8,814,477
Balance Sheet Projections

Current Assets
Cash 32,722,417 41,771,621 93 664 910 59,455 489 68,076,222
Account
Receivables
0 0 0 0 0
Total Current
Assets
32722,417 41,771,621 50,684,910 99,455489 63,076,222
Long-Term Assets
Prop. Systems
and
Equipment(net)
0 0
Total Long-Term
Assets
0 0 0 0 0
Total Assets
32,722417 41,771,621 50,684,910 59,455,489 63,076,222
Liabilities and
Stockholder’s Equity
Current Liabilities
Account Payable 316 417 321 821 7195 333,453 3;9,09
Line of Credit 0 0 0 0 0
Total Current
Liabilities
316,617 321,821 327,495 333,453 339,709
Total Liabilities 316,617 321,821 327,495 333,453 339,709
Stockholder's Equity
Common Stock 60,000,000 60000,000 60,000,000 60,000000 60,000,000
Retained
Earnings
(17,544,000) (8,550,200) 367,415 9,122036 17,735513
Total
Stockholders'
Equity
32,406,000 41449,800 50,357,415 59,122,036 67,736,513

Total Liabilities
&
Stockholder’s
Equity
32,722,417 41,771,621 50,684,910 59455,489 63,076,222
Cash Flow Statement

CASH INFLOWS
Collection of
Accounts
Receivable
0 31,887,500 31,687,500 31,687,500 31,837,930
Proceeds from line
of Credit
0 0 0 0 0
Proceeds from
Shareholders
50,000,000 0 0 0 0
TOTAL CASH
INFLOWS
60,000,000 31,687,930 31,687,500 31,687,500 31,667,500
CASH OUTFLOWS
Payment on
account Payable
17,277,933 22,839,298 22,774,211 22116921 23,088,787
Payment to
Purchase Fixed
Assets
0 0 0 0 0
Payment of
Principal to
Shareholders
0 0 0 0 0
Payment of Cash,
Distributions to
Shareholders
0 0 0 0 0
Principle Payment
- Line of Credit
0 0 0 0 0
Interest Payment -
Line of Credit
0 0 0 0 0
TOTAL CASH
OUTFLOWS
17,277,583 22,638,296 22,774,211 22,916,921 23,566,767
NET CASH FLOWS 32,722,017 9,049,204 8,913,289 8,770,579 8,620,733
CASH, BEGINNING
OF PERIOD
0 32,722,417 41,771,621 50,680,910 93,455,493
CASH, END OF
PERIOD
32,722,017 41,771,621 50,684,910 59,455,4E9 68,076,222

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